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Sanderson Farms, Inc. Provides Update on Hurricane Florence Damage

LAUREL, Miss.--(BUSINESS WIRE)--Sep. 17, 2018--
Sanderson Farms, Inc. (NASDAQ: SAFM) today reported that the Company
continues its assessment of damage to its North Carolina assets caused
by Hurricane Florence. The Company is pleased to report that it has
still received no report of serious injuries or loss of life among its
employees and growers.

As earlier reported, the Company experienced no significant damage to
either of its North Carolina processing facilities, feed mill or two
hatcheries. The Company’s facilities located in the affected area
maintained generator power until permanent electrical service was
restored. The Company resumed operations at its feed mill located in
Kinston, North Carolina, this morning. However, many roadways in North
Carolina remain impassable, serious flooding continues, and local
streams and rivers are expected to crest later this week. The Company
will resume operations at its Kinston, North Carolina, processing plant
on Tuesday, and at its St. Pauls processing plant by the end of this
week, once it is safe for employees to navigate roads and highways.

The Company continues its assessment of damage to independent farms and
losses to its live inventories. Out of 880 broiler houses in North
Carolina, 60 have flooded. Another six houses experienced damage and
will be unable to house broilers until repairs are made. In addition to
the affected broiler houses, four breeder houses out of a total of 92 in
North Carolina flooded. At this point, none of the Company’s 33 pullet
houses have reported serious damage. As a result of these losses, the
Company estimates that approximately 1.7 million head of broiler
chickens out of an average live inventory of approximately 20 million
head, ranging in age from six days to sixty-two days, were destroyed as
a result of flooding. In addition, approximately thirty farms, housing
approximately 211,000 chickens per farm, in the Lumberton, North
Carolina, area are isolated by flood waters and the Company is unable to
reach those farms with feed trucks. Losses of live inventory could
escalate if the Company does not regain access to those farms.

The Company does not believe the loss of housing capacity will affect
its ongoing operations, as it can shorten layouts and take other
temporary measures to compensate for these losses.

In addition to the loss of live birds, the Company will be unable to
hatch and place live broilers in the field at its normal rate during the
coming week. While the Company maintained operations at its hatcheries,
the Company was unable to set eggs in hatcheries on its normal schedule.
The reduced egg sets and chick placements will affect the Company’s
weekly processing volumes through December, with the reductions
occurring primarily during October and November.

Electrical power is being restored to the farms of independent contract
producers on a steady basis, but the Company believes it could be as
long as three weeks before power is fully restored to all of its
independent contractors’ farms. Until power is restored, equipment on
grow out farms, including ventilation, feeding and watering equipment,
will be operated using electricity generated by diesel-powered
generators. The Company is providing diesel fuel to its independent
contract producers to allow them to run their generators and maintain
power to farms. The Company believes it has been able to secure
sufficient diesel fuel to operate all of the farms housing its live
inventories.

Sanderson Farms believes the terms, conditions and extent of its
insurance coverage will cover a significant portion of losses resulting
from this storm. The Company’s retention under its policy is $2.5
million.

Joe Sanderson, Jr., chairman and chief executive officer of Sanderson
Farms, Inc., commented, “I am relieved that it appears the Company’s
employees and independent contract producers experienced no loss of life
or serious injuries. The magnitude of this storm and the damage it has
caused continue to be widespread, and I am pleased that our people
remain safe.”

Sanderson continued, “I am also pleased that our assets were not
significantly damaged by the hurricane. While the storm’s impact on our
live inventories and live production process will have an impact on the
Company’s capacity and volume over the next two months, none of the
losses sustained will be long term. The impact on volume from our live
losses will be spread over three months, although inefficiencies
resulting from bird stress, overtime pay and loss of processing days
will affect the Company’s fourth fiscal quarter. Our focus over the next
few weeks will include working to maintain our assets, responding to
customers’ needs and replenishing our live production inventories.

“Most importantly, we will provide ice, water, food and other
necessities to those affected by this catastrophic storm. While we will
work hard over the next week to get our operations back on line, our
primary focus will be to respond to the needs of our local communities.
We are fortunate that Sanderson Farms sustained only minimal damage and
no loss of life as a result of the storm. We will continue to help those
whose lives have been more seriously disrupted,” Sanderson concluded.

Sanderson Farms, Inc. is engaged in the production, processing,
marketing and distribution of fresh, frozen and minimally prepared
chicken. Its shares trade on the NASDAQ Global Select Market under the
symbol SAFM.

This press release includes forward-looking statements within the
meaning of the “safe harbor” provisions of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended.Forward-looking statements are based on a
number of assumptions about future events and are subject to various
risks, uncertainties and other factors that may cause actual results to
differ materially from the views, beliefs, projections and estimates
expressed in such statements.These risks, uncertainties and
other factors include, but are not limited to, those discussed
under “Risk Factors” in the Company’s Annual Report on Form 10-K for the
fiscal year ended October 31, 2017, the Company’s subsequent reports on
Form 10-Q, and the following:

(1) Changes in the market price for the Company’s finished products and
feed grains, both of which may fluctuate substantially and exhibit
cyclical characteristics typically associated with commodity markets.

(2) Changes in economic and business conditions, monetary and fiscal
policies or the amount of growth, stagnation or recession in the global
or U.S. economies, any of which may affect the value of inventories, the
collectability of accounts receivable or the financial integrity of
customers, and the ability of the end user or consumer to afford protein.

(3) Changes in the political or economic climate, trade policies, laws
and regulations or the domestic poultry industry of countries to which
the Company or other companies in the poultry industry ship product, and
other changes that might limit the Company’s or the industry’s access to
foreign markets.

(4) Changes in laws, regulations, and other activities in government
agencies and similar organizations applicable to the Company and the
poultry industry and changes in laws, regulations and other activities
in government agencies and similar organizations related to food safety.

(5) Various inventory risks due to changes in market conditions,
including, but not limited to, the risk that net realizable values of
live and processed poultry inventories might be lower than the cost of
such inventories, requiring a downward adjustment to record the value of
such inventories at the lower of cost or net realizable value as
required by generally accepted accounting principles.

(6) Changes in and effects of competition, which is significant in all
markets in which the Company competes, and the effectiveness of
marketing and advertising programs. The Company competes with regional
and national firms, some of which have greater financial and marketing
resources than the Company.

(7) Changes in accounting policies and practices adopted voluntarily by
the Company or required to be adopted by accounting principles generally
accepted in the United States.

(8) Disease outbreaks affecting the production, performance and/or
marketability of the Company’s poultry products, or the contamination of
its products.

(9) Changes in the availability and cost of labor and growers.

(10) The loss of any of the Company’s major customers.

(11) Inclement weather that could hurt Company flocks or otherwise
adversely affect the Company’s operations, or changes in global weather
patterns that could affect the supply and price of feed grains.

(13) Failure to successfully and efficiently start up and run a new
plant or integrate any business the Company might acquire.

(14) Unfavorable results from currently pending litigation and
proceedings or litigation and proceedings that could arise in the future.

Readers are cautioned not to place undue reliance on forward-looking
statements made by or on behalf of Sanderson Farms.Each
such statement speaks only as of the day it was made. The Company
undertakes no obligation to update or to revise any forward-looking
statements. The factors described above cannot be controlled by the
Company. When used in this press release or in the related conference
call, the words “believes,” “estimates,” “plans,” “expects,” “should,”
“could,” “outlook,” and “anticipates” and similar expressions as they
relate to the Company or its management are intended to
identify forward-looking statements.Examples of
forward-looking statements include statements of the Company’s belief
about future operations, weather, earnings, production levels, capital
expenditures, grain prices, global economic conditions, supply and
demand factors, growth plans and other industry conditions.